NC Flood Insurance Facts and Myths

If your home is damaged in a flood, are you covered with proper NC flood insurance?

You may not realize that standard home insurance policies do not cover flood water damage, and that umbrella policies won’t cover them either. As a homeowner in North Carolina, it is so important to pick up separate, specific policies against water damage for your home and your possessions. This article will provide a few facts about NC flood insurance, and attempt to clear up some myths.

Many people think that if they do not live near a river or the coast, they are not in danger of flooding, giving them a false sense of security. Floods are the number one natural disaster in the United States and high-risk flood areas are not the only ones that can flood:

Flash floods, inland flooding, and seasonal storms affect every region of the country, wiping out homes and businesses. People need to know that they can take steps to protect their financial security before disaster strikes. However, many residents and businesses are unaware that they qualify for flood insurance or that policies are more affordable than they may think.

When a severe storm hits your home or business, flooding is a very real and very disastrous possibility–be the one ready to rebuild. Only a separate flood insurance policy covers water damage.

Take a moment to consider the 4 points below:

#1. Buy your flood policy now – you can’t afford to gamble.

Extreme events, regardless of their labels, happen every year in almost every state-and mostly without warning.

“Statewide, 17 people died…Rivers overflowed, seven inches of rain fell in a single day, and the damage cost California more than $400 million. It was California’s wettest winter on record. It was the El Nino 1997-98.”

“…In California since 1978, 37.4% of paid claims, are due to the four El Niño years of 1982/83 and 1997/98….4.8 times higher than non-El Nino years.”

#2. Everyone in the state needs to buy a NC flood insurance policy—Don’t be fooled by the line on the flood zone map–25% of properties in the low to moderate risk flood zone will suffer a flood!

Recently we have seen flooding happen in low risk flood zones in South Carolina, Texas, and Nevada, brought on by extreme weather events in places that no one thought would flood. Don’t be next.

#3. A flood policy is the only protection when the levees fail. Levees and dams are NOT built for extreme weather-they age, fail, and wipe out whole neighborhoods.

South Carolina recently experienced levee failures. Be aware–levees and dams can and do FAIL– America’s dams earned a “D” in The American Society of Civil Engineers’ most recent Report Card for America’s Infrastructure(2013). About 4,000 dams in the country are in need of repairs – and about half of those deficient dams could cost lives if they were to fail.

“There are more than 87,000 dams in the U.S. and the average age is 52 years old. Texas has the most dams–more than 7,000.”

#4. Rebuilding is most possible with your NC flood insurance policy. You can not rely on disaster assistance to give you back what you lose.

Before most forms of Federal disaster assistance can be offered, the President must declare a major disaster. The most common form of Federal disaster assistance is a loan, which must be paid back with interest. The average Individuals and Households Program award for Presidential disaster declarations related to flooding in 2008 was less than $4,000.

Longer-term rebuilding and repair work is not covered by the federal program. Homeowners can apply for a low-interest loan from the US Small Business Administration to repair or replace their primary residence to a pre-disaster condition, but loans are capped at $200,000, plus $40,000 for personal property, including automobiles, furniture, appliances and clothes.

“Think NC flood insurance is expensive? The facts are that the average premium for federally backed flood insurance through the NFIP is only $550 a year. The cost of a Preferred Risk Policy starts as low as $129 a year. Compare that with the repayment on a $50,000 Federal disaster home loan at 4 percent interest, which will cost you $303 every month for 20 years. Which is truly the better deal?”